The other day I overheard a woman tell a colleague, “I’m not going to pay someone $60/hr (with emphasis and eye-rolling) to do that for me when I can have an intern do it for free”. She was referring to her marketing. She had asked around and received a number of quotes from professionals and just couldn’t understand why their rates were so high – so she was going to call a local college and get an intern to do it.
I have nothing against interns – I happen to think that employing an intern is a great way to help someone learn a new skill (and hopefully you’re paying them something as well). But when you assume that you can use an intern to do critical tasks in your business just to save a few bucks, you’re missing the point. This business owner was not looking to mentor someone – she was intending to hand off a service that required a high level of expertise so she could get it done on the cheap.
This exchange got me thinking about my own spending practices – what I will pay for vs. what I won’t, and why. It’s an indication of the value I put on my own work and the work of others.
How do you know when higher prices are worth it?
Take the example of a hair salon.
The hair salon that I go to isn’t cheap. It’s not the most expensive place in town, but it’s most definitely not the cheapest either.
I don’t choose my salon based on the price. I choose my salon based on the individual stylist. She’s been at this salon for a long time. She keeps up to date on styles and trends. She mentors and trains others.
But more than that, she pays attention to what matters – my hair. She knows how fast it grows, where all the weird cowlicks are, the texture, and how it behaves under many different circumstances (length, shape, humidity, etc.). She knows HOW to cut my hair in a way that works with it instead of against it. She knows this because she pays attention, and because she’s been doing this for a very long time. She’s an expert.
Sure, she could cut everyone’s hair the same way, but she doesn’t. When I first started going to her she told me that it might not be perfect the first time – that it would take a while for us to get used to each other and to get things where they needed to be. She encouraged me to be patient. She instantly earned my trust.
See what I’m getting at?
I’m clearly not paying for a haircut – I’m paying for her expertise. It’s called value-based pricing. My stylist’s services come at a higher price point than many other stylists in the area, but to me, having a consistent haircut that works for my hair every single time is worth the extra cost. I’ve wasted a lot of time and money on the alternative.
When someone scoffs at a professional’s rates, they usually don’t understand the insane number of hours, months, and often years that this person has spent honing her craft, nor do they factor in her business’s operating costs (go ahead – ask your stylist how much her tools cost and how much she pays for rent).
So for the person who won’t pay X for a service, I want her to take a good hard look at why. Can she get the same quality for less money? Is she not getting a good vibe from the provider? Does she not have it in her budget? Or does she just not WANT to spend the money?
What about you?
I invite you to pay attention to where and how you spend your money. Take a hard look at your expenses. Are there places in your life where you’re spending more than necessary, and if so, why? And on the flip side, where might you be taking the cheap way out when you could probably get better results if you paid a professional a bit more? Be brutally honest. There is no right or wrong – it just comes down to your values and how much of a risk you are willing to take on certain things.
You’ll save time and money over the long term by getting clear on your values, strengths, weaknesses, and needs. Then you can make an informed decision on which things can be done on the cheap (or even free), and which require a bigger investment.
And remember, an investment isn’t always money – your time is an investment too!
What do you think? Let’s chat in the comments.
Image credit: JodyDigger